Indonesia: Manufacturing PMI rebounds to expansion territory in September
October 1, 2014
The manufacturing Purchasing Managers’ Index (PMI) increased from 49.5 in August to 50.7 in September, according to a release provided by HSBC. August’s result had marked the lowest reading in a year, but the index is now back above the 50-threshold, which indicates expansion in the manufacturing sector.
September’s figure reflects an improvement in terms of output and new orders as both returned to growth. Export orders were also up in September, after having declined in the previous three months. Due to the rise in production and demand, manufacturers increased their purchasing activity. Despite these improvements, the level of employment was down for a second consecutive month.
According to HSBC, “The rebound in manufacturing sector conditions in September provides some relief, as it confirms that the contraction in the August PMI marked a temporary lull rather than a reversal of trend. That said, the expansion in the September PMI was only modest. A further deterioration in payrolls and an ongoing contraction in work backlogs suggest that manufacturing sector conditions could remain moderate over the near-term.”
Author: Carl Kelly, Economist